Objectives

The Fund follows the investment guidelines of the equity funds in Southwestern University’s Endowment Funds: to preserve and expand the purchasing power relative to inflation for the future of Southwestern University.

Additional objectives of this Fund are as follows:

The Fund attempts to assume risks similar to those of the Standard and Poor’s 500 Index (S&P 500). Thus, the Fund attempts to maintain a beta near 1.00.

The Fund looks to realize the highest level of return, consistent with its benchmark’s risk level.

The Fund seeks a turnover rate of less than 100%. The Fund needs a healthy rate of turnover to achieve its goal of capital growth, but excessive turnover violates the Fund’s long-term appreciation strategy as well as diminishes returns through transaction costs.

The Fund also tries to achieve above average risk-adjusted returns based on the Sharpe and Treynor performance rations. Positive risk-adjusted returns in both of these measures reflect superior results; therefore, the risk-adjusted returns of each measure should be higher than the S&P 500’s risk-adjusted return.

The Fund helps the Managers gain valuable experience in creating and maintaining a portfolio and developing financial analysis skills in a real world situation.

An emphasis on buy and sell points to help cut losses by automatically selling portion of our position, or buying additional shares as the stocks cross certain price thresholds.